Budget Execution Controls and Corruption Perception: A Cross-Country Analysis

• In Event: Fiscal Institutions and Capacity

Abstract

This paper examines the empirical link between controls in execution of government budgets and corruption perceptions using cross-country data. We utilize Public Expenditure Financial Accountability (PEFA) assessment scores over the 2000-2023 period, and corruption perception index (CPI) and bayesian corruption index (BCI) to measure PFM performance and perceived corruption, respectively. Our analysis reveals that while the CPI shows limited correlation with public financial management (PFM) pillars, the BCI demonstrates statistically significant associations, particularly with budget pillars. Strong budget execution controls are shown to be critical in reducing perceived corruption. These findings, aligned with the literature, suggest that effective PFM systems in budget execution play a vital role in combating corruption perception.

Authors

• Mehmet Tosun, University of Nevada, Reno

• Merinda Zywicz, mzywicz@gmail.com